OPEN SKIES IN THE DOMINICAN REPUBLIC HELD HOSTAGE

UNCLAS SANTO DOMINGO 002899 SIPDIS SENSITIVE SIPDIS DEPT FOR WHA/CAR, WHA/EPSC, EB/TRA/AVP; DEPT PASS FAA AND DOT E.O. 12958: N/A TAGS: EAIR DR SUBJECT: OPEN SKIES IN THE DOMINICAN REPUBLIC HELD HOSTAGE BY LUGGAGE HANDLERS ¶1. (SBU) Summary. Although the Dominican Government signed the 1986 and the 1999 Air Trade Agreements between the United States and the Dominican Republic, the Dominican Congress never ratified them. According to Dominican civil aviation authorities, the agreements are not legally binding. Airport managers point to Article 8.3 as the cause, stating that they do not want to lose the ground-handling business. End Summary. ¶2. (U) The 1949 Air Trade Agreement is the only ratified air trade agreement between the United States and the Dominican Republic. Although a 1986 air trade agreement was signed between the two countries, the Dominican Congress never ratified it. In December of 1999, the United States and the Dominican Republic signed the 1999 Air Trade Agreement. The signing of this agreement was a step forward for Open Skies, which provides greater access and cheaper tickets to passengers, (taxes not included). Unfortunately, the 1999 Air Trade Agreement is not recognized by the Dominican Republic because the Dominican Congress has yet to ratify it. ¶3. (SBU) Many countries either refuse to sign the current air trade Open Skies agreements or ratify them because the host country would like to protect its national airline from the better operated, more efficient, and less costly foreign airlines. However, the Dominican Republic does not have a national airline nor does it plan to start one anytime soon. ¶4. (SBU) Some aviation experts tie the Dominican unwillingness to sign the Agreement with their current category status under the standards of the ICAO (International Civil Aviation Organization). Applying the ICAO safety standards, the U.S. Federal Aviation Administration (FAA) has listed the Dominican Republic as Category 2, a ranking that prohibits Dominican airlines from flying to the United States. This ranking has applied for the last 13 years. Some analysts consider that a Category 2 ranking dissuades some tourists from visiting because of aviation safety concerns. However, the reality in the Dominican Republic is just the opposite. The tourism sector has only grown, especially over the last 4 years, (for 2006, the Dominican Republic expects to see well over three million visitors, with about a third coming from the United States alone). ¶5. (U) But to be fair, the Dominican Republic is working hard to correct this status quo. Over the last couple of years, the Dominican Republic has sought the technical expertise of the FAA to help craft the necessary changes in its laws and to train its flight inspectors better. At the moment, the President's office plans to deliver to Congress a new aviation law that if passed, could pave the way for Category 1 status. -------------- Disagreeing about Agreements -------------- ¶6. (U) Category 1 status and the Open Skies Agreement are completely separate issues and the combination of the two is not the root cause for the lack of ratifying the agreement. Although some would like to believe that this is so, Embassy contacts point to a single article in the Agreement as the cause: Article 8.3. Under Article 8, Commercial Opportunities, paragraph 3 provides that "each designated airline shall have the right to perform its own ground-handling in the territory of the other Party...The rights shall be subject only to physical constraints resulting from considerations of airport safety." ¶7. (SBU) This paragraph alone set off a major legal battle in 2004 between American Airlines and Aerodom, the private concessionaire for airport management for many airports in the Dominican Republic (the Hazoury family is the principal inivestor in Aerodom). The U.S. airline wanted to perform its own ground-handling in the spirit of the 1999 Air Trade Agreement, but Aerodom balked, stating that the 1999 agreement had not been ratified. At the end of the day (back in 2005),the Dominican civil aviation board (DGAC) upheld Aerodom,s contention and issued a finding that according to the Dominican constitution the agreement is not binding because the Congress has yet to ratify it. ¶8. (SBU) Getting congressional ratification of the 1999 Air Trade Agreement will entail an uphill battle, according to information from onversations with Aerodom and with the management of regional airports at La Romana, Puerto Plata, and Punta Cana, as well as e-mails from previous embassy aviation officers. None of the airport managers wants to lose the luggage-handling business. They have discussed with their congressional representatives their opposition to the agreement -- part of the reason that Congress has not considered ratification since the 1999 signature. ¶9. (SBU) Ivan Vsquez, deputy director for civil aviation, recently stressed the importance of presenting the 1999 Agreement to the DGAC board. Vasquez asserted that this was not a "trap" to undermine the agreement. He claimed that Director General of Civil Aviation Norge Botello wanted the board to re-examine the text (yet again) before sending it to Congress. Econoff responded to Vsquez that the agreement is already signed, but any questions from the DGAC board would be welcomed. ¶10. (SBU) Comment: The DGAC board has known about this agreement for many years. They reviewed its status during the Aerodom dispute with American Airlines in 2004/2005. Putting the text to the board is another chance either to delay the ratification process or to attempt to reopen the agreement to negotiate Article 8.3. The good news is that there is a new Congress. ¶11. (U) Drafted by Chris Davy. HERTELL